The top question you should ask your accountants
A few weeks ago, our Senior Finance Manager, Cara, noticed something unusual on one of our client’s accounts…
A significant insurance bill — several thousand pounds — had skewed the month’s accounts. It appeared as though the business had made a loss when, in reality, they had made a small profit.
The issue? This bill covered 12 months, but the full amount was recorded in just one month. Only 1/12 of the total should have been reflected in that month’s accounts, with the remainder spread over the next 11 months.
This adjustment ensures the accounts accurately represent the business’s financial health.
Why share this story?
It answers an important question that a prospective client asked me recently: “Garry, I know you produce a lot of financial information, but how do you actually know it’s accurate?”
This is a question businesses do not ask their accountants often enough, but it’s crucial.
Many business owners receive financial reports from their bookkeeper or accountant and assume they’re correct. But accuracy isn’t guaranteed without the right processes in place.
At Insight Associates, every piece of information undergoes a thorough review before it reaches our clients. A second pair of eyes meticulously checks every detail — just like Cara did with that accruals error. While no system is flawless, our process dramatically reduces mistakes, and it’s a standard practice in any well-run accountant’s office.
It also serves as a safeguard against fraud, as it is significantly harder for anyone to misappropriate funds when their work is continuously verified by another qualified professional.
But here’s the problem: Smaller internal teams often lack these robust processes. Often they just don’t have enough people to institute these systems. Other times, they don’t understand that they need them, or appreciate how crucial they are.
Without built-in checks and balances, the accuracy — and therefore the usefulness — of the financial information they give you is questionable.
This issue is more common than you might think and is often why company owners turn to us. They sense something’s off: Financial reports that don’t match up with their business reality, or a bookkeeper who’s consistently late in recording transactions.
When we step in, we often find accounts in disarray, but no one else in the business had strong enough financial skills to pinpoint the exact problem.
This isn’t “just” an accounting issue. Inaccurate numbers mean you don’t truly know where your business stands — whether you’re profitable, which areas are thriving and which need attention.
Worse, when you’re working off incorrect financial data you can end up making poor decisions, potentially resulting in costly mistakes.
The bottom line? You need to work with a team that is both large enough to have rigorous verification processes in place, and that is committed to using them. This includes essential steps like reconciling your accounts with your bank records — a basic process overlooked by many teams.
At Insight Associates, our entire service is geared towards providing you with accurate, timely and useful financial information that you can rely upon.
When you work with us, you get access to a full team of accounting professionals, with a broad array of skills and experience. The processes to check each other’s work are built-in and absolutely integral to the way we work. After all, the numbers we provide you are only useful if they are accurate.
To find out more about how we can help you manage your finances more effectively, and empower you to use those numbers to make better business decisions, maximise your profit and grow much faster, please get in touch today.
Simply email garry@insightassociates.co.uk or call us on 01279 647 447 to arrange a no-obligation consultation.
Warmly,
Garry
